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Cabletron axes 600 jobs and shifts focus to resellers

by Stuart Lauchlan in Silicon Valley

Troubled networking supplier Cabletron announced yesterday that it will axe 600 jobs, almost 10 per cent of its worldwide workforce, at a cost of up to $30 million, as part of a wider 'streamlining' exercise that shifts greater emphasis onto resellers.

The job cuts come as the company tries to realign its corporate strategy to generate savings of at least $55 million a year. A major element of that realignment will consist of "aggressively developing partnership and acquistion opportunities" and increasing the amount of distribution that goes through partners and resellers.

The company intends to consolidate its New Hampshire and Massachusetts operations into other sites while other sites worldwide will be chosen for closure in the coming months. But in a statement Cabletron said it also plans to focus on expanding its presence in international markets.

Cabletron issued a profit warning earlier this month, predicting revenue of no more than $340 million against a total for the previous year's quarter of $361 million. The company insists that the restructuring will not affect the planned takeover of Digital's Network Products Group.